 New year offers hope to buyers
Loan Market Group executive Director John Kolenda is confident that 2009 will be a great year to buy property. The new year could bring some great opportunities, but warns that house prices will not recover for some time.
Government handouts in December combine with falling property prices and lower interest rates to create a ideal climate to purchase a property. First home buyers also have an added bonus, with the first home owners grant (FHOG) being doubled to $14,000 until July this year, or tripled to $21,000 for new buildings.
"Despite the global economic uncertainty, the conditions in Australia for those seeking to enter the property market are ideal,'' Mr Kolenda said.
"Mortgage holders in the coming year are likely to benefit from the lowest variable interest rates ever offered in Australia as the cash rate could fall to 2.5 per cent.''
The boost to the FHOG continues until mid-2009 and house prices are expected to fall further throughout the year. An increase in Australians returning from overseas means there may be more buyers in the market this year
It is also widely expected that interest rates will fall again, at least to 3 per cent, maybe even lower, in an attempt to boost consumer confidence and get us all spending again. The government has already handed out one off payments to eligible families and boosted the FHOG, in an attempt to halt Australia's slide towards a recession and prevent going into a budget deficit.
CommSec chief economist Craig James said property prices would rise moderately this year due to an undersupply of housing and the increase to the FHOG.
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